Home | Perspectives |Shale Energy Law Blog | Legislative Update: Senate Bill 554 Regarding Release of Oil and Gas Leases Awaiting West Virginia Governor’s Signature
Print Friendly, PDF & Email
Legislative Update: Senate Bill 554 Regarding Release of Oil and Gas Leases Awaiting West Virginia Governor’s Signature

The West Virginia Legislature has passed a bill requiring that a lessee deliver to the lessor, at no cost to the lessor, a properly executed and notarized release of a terminated, expired, or cancelled lease in recordable form within 60 days after the termination, expiration, or cancellation unless a different time is required by the lease. The bill is awaiting signature by West Virginia’s Governor and, if signed, will be effective May 31, 2020.

If the lessee fails to provide a timely release, the lessor may in good faith serve notice of the lessee’s failure to do so. The information that the lessor is required to include in the notice includes, but is not limited to, a statement that if the release of the lease or a written dispute of the purported termination, expiration, or cancellation of the lease is not received by the lessor from the lessee within 60 days from receipt of the notice, the lessor shall have the right to file an affidavit of termination, expiration, or cancellation of the lease. The notice must be sent to lessee, lessee’s assignee, all other lessors, and all other persons who have an interest in the leasehold estate or the oil and natural gas leased based upon the lessor’s reasonable examination of the public records. The lessor’s inability to afford notice to everyone to whom notice is to be given does not relieve a lessee of its obligation to respond to the notice. If a lessee disputes in good faith that the lease is terminated, expired, or canceled, the lessee must deliver a written dispute of the notice to the lessor detailing the good-faith basis for its disagreement not more than 60 days after receipt of the notice.

A lessor who has served a notice under this section and fails to receive a timely dispute from a lessee may record a notarized affidavit of termination, expiration, or cancellation of the lease in the office of the county clerk in the county or counties where the lands covered by the lease are situated. The county clerk of each county shall accept all such affidavits and shall enter and record them in the official records of that county and shall index each in the indices under the names, as they appear in the affidavit, of the original lessor, the original lessee, the lessor seeking the release, and the lessee identified in the affidavit. A lessor who files an affidavit must serve a copy of the affidavit upon the lessee, lessee’s assignee, all other lessors, and all other persons who have an interest in the leasehold estate or the oil and natural gas leased based upon the lessor’s reasonable examination of the public records.

The filing of an affidavit under this section does not constitute a modification of a lease and does not limit, waive, or prejudice any claim or defense of any party to the lease in law or in equity. A lessor’s decision not to use the provisions of this section is not evidence that a lease is still in effect.